RTA Lawsuit Claims United Runs 'Sham' Business
From the Associated Press
A transportation agency plans to file a lawsuit today alleging United Airlines is falsely claiming to buy huge amounts of jet fuel out of a small, rural Illinois office that doesn't even have a computer to avoid paying tens of millions of dollars in taxes in Chicago, where the purchases are allegedly being made.
The Regional Transportation Authority alleges United Aviation Fuels Corp., a subsidy of United Airlines, has operated a "sham" office in the DeKalb County community of Sycamore since 2001 after reaching an agreement to pay the town more than $300,000 a year — a fraction of what it would have owed in sales taxes in Chicago and Cook County.
"The only reason that United Fuels has an office in Sycamore is to attempt to create a sham tax situs (location) for fuel sales in a lower taxing jurisdiction," reads a draft of the lawsuit obtained by The Associated Press.
United officials say they have not seen the lawsuit, but that the Sycamore operation is legal.
The RTA, which contends the office has no computer and is staffed by one person who only works part time, said consultants visited the site on a recent weekday and found it locked with nobody inside. The agency said judging from the few chairs and empty desks seen through a window, there is little, if any, business occurring in the office.
"Whoever is out there is not negotiating hundreds of millions of dollars worth of jet fuel," said Jordan Matyas, the RTA's chief of staff. He said any negotiations for fuel — as well as delivery scheduling, accounting, credit approval and administrative decisions — are being done in the Willis Tower in downtown Chicago, where United is headquartered.
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From the Associated Press
A transportation agency plans to file a lawsuit today alleging United Airlines is falsely claiming to buy huge amounts of jet fuel out of a small, rural Illinois office that doesn't even have a computer to avoid paying tens of millions of dollars in taxes in Chicago, where the purchases are allegedly being made.
The Regional Transportation Authority alleges United Aviation Fuels Corp., a subsidy of United Airlines, has operated a "sham" office in the DeKalb County community of Sycamore since 2001 after reaching an agreement to pay the town more than $300,000 a year — a fraction of what it would have owed in sales taxes in Chicago and Cook County.
"The only reason that United Fuels has an office in Sycamore is to attempt to create a sham tax situs (location) for fuel sales in a lower taxing jurisdiction," reads a draft of the lawsuit obtained by The Associated Press.
United officials say they have not seen the lawsuit, but that the Sycamore operation is legal.
The RTA, which contends the office has no computer and is staffed by one person who only works part time, said consultants visited the site on a recent weekday and found it locked with nobody inside. The agency said judging from the few chairs and empty desks seen through a window, there is little, if any, business occurring in the office.
"Whoever is out there is not negotiating hundreds of millions of dollars worth of jet fuel," said Jordan Matyas, the RTA's chief of staff. He said any negotiations for fuel — as well as delivery scheduling, accounting, credit approval and administrative decisions — are being done in the Willis Tower in downtown Chicago, where United is headquartered.
Read more in our daily News Update...